June events to pump millions into local economy ( Front Page Headline…

June events to pump millions into local
economy
( Front Page Headline News, Section One)
By Dean Calbreath
STAFF WRITER


June 1, 2008

A poet once described June as the "month of leaves and roses."

But in San Diego, this June is also the month of a marathon, a
convention, a golf tournament and a fair that will bring tens of
thousands of visitors and millions of dollars into the local economy.

Today's Rock 'n' Roll Marathon will be followed in short order by the
U.S. Open golf tournament, from June 9 to 15; the BIO International
Convention, from June 17 to 20; and the San Diego County Fair, from
June 14 to July 6.

Promoters say the four events will inject a total of more than $250
million into the local economy. Although some economists say that
figure is unrealistically high, during a summer in which high gasoline
prices and the national economic slowdown will eat into tourist
spending, any infusion of cash into the economy will be welcome.


When people come
here for conferences,
conventions, even
major sporting
events, a good
number of them
extend their stay
because San Diego's
such a juicy-great
place to spend a lot
of time in," said
Stephen Zolezzi,
executive vice
president of the
Food & Beverage
Association of San
Diego County.

In addition, events such as the U.S. Open and BIO attract an upscale
audience with the means to spend.
"When you're talking about an event like the U.S. Open, you're talking
about people who make an average of $220,000 a year," said Kathleen
Davis, executive director of the Sports Management Research Institute
in Florida. "These people could be spending $600 to $900 per day,
including their hotel rooms. The more you make, the more you spend."

Besides the immediate impact of tourist spending, there's also an
additional benefit to having the free advertising that comes from high-
profile events, whether it's the word-of-mouth recommendations from
the conventioneers at BIO or the flow of international news stories
emanating from the U.S. Open.

"The Open is going to be broadcast by NBC, and you'll see the name San
Diego in print and broadcast media, repeated again and again during
the event," said Sal Giametta, vice president of communications at the
San Diego Convention and Visitors Bureau. "You can't put a number to
the value of that kind of publicity."

The economic impact an event can provide generally depends on how
many of the visitors come from outside the area. People from San Diego
or Orange counties who drive to the county fair in Del Mar don't have
the same effect on the economy as visitors flying to the U.S. Open from
New York or Japan.

The U.S. Open is expected to draw 50,000 spectators per day during its
run at Torrey Pines, not including representatives from 3,500 media
outlets. According to a study provided by the U.S. Professional Golfers
Association, the U.S. Open in Pinehurst, N.C., in 2005 brought $75
million in direct economic benefit from hotel stays, restaurant visits
and retail spending and nearly $50 million in indirect benefits, such as
the salaries of the vendors, waiters and other people who make money
from the event.

Many economists say that such calculations are far too optimistic. The
indirect benefits, they say, are based on debatable economic
assumptions about how much money spills over from the event into the
local economy. And the direct benefits of hotel and restaurant traffic
don't take into account how many tourists San Diego normally would
attract. In other words, if the U.S. Open weren't held here, not all the
hotel rooms would go empty.

Victor Matheson, a specialist in sports economics at Williams College in
Massachusetts, estimated that the real impact could be 75 percent to 90
percent below what the PGA predicts.

"A typical rule of thumb that most economists use with sports
promoters' estimates is to move the prediction one decimal point to the
right," he said, meaning that the PGA's $100 million prediction may
end up being more like $10 million and the marathon's impact could be
more like $5 million.

Andrew Zimbalist, a sports economist at Smith College in
Massachusetts, said sports promoters generally use unrealistic
calculations to produce upbeat estimates. "If you just look at the
impacts of past Super Bowls, Olympics and golf tournaments, they have
varying impacts: Some are positive, some are negative, and some have
no impact at all," he said.

But Jerry Morrison, a hospitality industry consultant in La Jolla, said
the U.S. Open will unquestionably have a positive effect on the local
economy, especially since it takes place before the summer rush of
families starting their summer vacations.

"The beginning of June is a very good time, since most schools don't
close until later in the month, so demand is still relatively low," he said.

The same could be true of the timing of BIO, which will bring 20,000
scientists and entrepreneurs to the San Diego Convention Center to
hear speakers such as former Secretary of State Colin Powell, Gov.
Arnold Schwarzenegger and genomics pioneer Craig Venter. Because 75
percent of the attendees will come from outside the county, that
translates into thousands of hotel rooms and restaurant meals. The
Convention Center estimates they will spend $35 million during BIO's
four-day run.

Because the marathon and county fair attract a high proportion of
locals, they probably won't create as much of an impact on the
economy, analysts say.

The locals ­ including visitors from Orange County or Los Angeles ­
are often day-trippers who return home once their participation in a
particular event is over. In contrast, the out-of-state golf fans or biotech
conventioneers generally pump money into the economy when they
splurge at local hotels and restaurants or buy souvenirs from local
vendors.

"I don't want to knock the fair," said Skip Hull, vice president of CIC
Research in San Diego, which monitors the tourism industry. "We all
enjoy the fair. I have a great time whenever I go. But to have an
economic impact, the dollars have to be derived from outside the local
economy. So yes, it probably has less impact."

Nevertheless, the fair's organizers say the event contributes more than
$100 million to the economy, mostly by providing employment to a
small army of 3,000 temporary vendors and staffers, at least half of
whom come from the San Diego area.

The Rock 'n' Roll Marathon also has a heavy local contingent, but it
manages to draw thousands of runners from elsewhere in the country
and the world. Last year, roughly 15,000 of the 21,000 runners in the
marathon came from outside the county, according to a study done by
George Washington University.

Assuming ­ perhaps optimistically ­ that these visitors spent an
average of 2½ nights at local hotels and went to restaurants for most of
their meals, the GWU study estimated that they would have spent more
than $48 million in the county.

But some economists cast doubt on those figures.

"The research that I've read suggests that the main way marathons
might help the local economy is that if you have local runners who are
interested in marathons, it keeps them in town rather than going
somewhere else with their running shoes and wallets," said Matheson,
the Williams College specialist in sports economics.

He said that even if a marathon brings in visitors from outside the area,
it also disrupts traffic patterns, causes transportation delays and keeps
some crowd-averse locals away from the route of the race.

"Some people come in a couple days early from outside the area and eat
very well at local restaurants, which brings in some money," Matheson
said. "On the other hand, when I ran the Boston Marathon, I went
home and collapsed and didn't do anything for 48 hours, so it can have
that kind of effect as well."